purchase property or llc that owns the property.

[Kyle Hipp]

Another question in the what if category. I am curious to the details and differences between purchasing a rental property from someone who owns the property through a LLC or just buying the LLC. What tax or other issues does this bring about or is it even possible to do this.

[Wayne Brooks]

The note with the bank likely has language regarding a change in ownership interest of the LLC. I would never let someone take over/buy my LLC with my personal guarantee still attached.....suicide. Putting financing aside, if you bought a property in an LLC say 5 years ago for $100k, and now the LLC's basis in the property is say $100k (depreciation subtracted, capes added) and you sell to me for $200k. If I buy the LLC my basis in the property is $100k, not $200k. If I need to sell the property later, because I couldn't sell the LLC, for $250k, my Taxable gain from the property is $150k, not $50k. To me, selling the LLC usually only makes sense in doing the flippy do dah, to avoid assignment/resale restrictions....not for longer term holds.